November Existing Home Sales

The housing market just keeps dragging down the economy, with small businesses likely to be among the hardest hit if the sector does not rebound.

This morning, the National Association of Realtors reported that sales of existing homes rose 5.6 percent in November from October. Good news, right? Well, not really. If you compare those figures to November 2009, when there was a tax credit in place for first-time homebuyers as part of the stimulus package, sales were down 27.9 percent.

And the 4.68 million homes sold amounted to fewer than the 4.75 million home sales that economists had forecast.

While National Association of Realtors Chief Economist Lawrence Yun saw the glass as half-full, others aren’t so sure.
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Mark Vitner, an economist with Wells Fargo, gave his blunt reaction to Bloomberg: “Housing is going to remain dead in the water through the middle of 2011. As foreclosures come back on the market, that will put downward pressure on prices.”

Sales of existing homes climbed in November, but sustained growth in the job market and access to credit were needed before home purchases reach a level that signals a recovery, analysts said on Wednesday.

In the latest report to reflect an improving economy, the National Association of Realtors said on Wednesday that sales of homes rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November, from about 4.43 million homes in October.

Still. the rate was nearly 28 percent below the 6.49 million of November 2009, and it fell below the pace of 4.75 million units that economists surveyed by Bloomberg had expected.

“We are underperforming, given the size of the population,” Walter Molony, a spokesman for the Realtors association, said. “Homes sales this year are sub-par. We should be over 5 million on a sustainable level.”

The November figure, a sharp reversal of the 26 percent plunge in existing home sales in October, refers to completed transactions for single-family townhomes, condominiums and co-ops.

Sales of existing homes rose less than forecast in November as the industry that triggered the worst U.S. recession in seven decades struggled to recover after a government tax credit lapsed.

Purchases increased 5.6 percent from the prior month to a 4.68 million annual rate, the National Association of Realtors said in Washington. Economists projected sales would rise to a 4.75 million pace, according to the median forecast in a Bloomberg News survey. The median price rose 0.4 percent from a year earlier.

Previous decreases in prices and mortgage rates have made houses more affordable, which may keep supporting demand after the end of a government tax credit caused the industry to slump. At the same time, unemployment hovering near 10 percent is a reminder it will take years for housing to regain pre-recession levels.
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Distressed sales, which include foreclosures and short- sales in which the bank allows a home to sell for less than the full amount of the mortgage, accounted for 33 percent of total sales, about the same as in prior months.

A total of six New Jersey food warehouses and offices could be shuttered, and more than 1,000 workers could lose their jobs, thanks to a labor dispute, according to an official with Avenel-based Woodbridge Logistics LLC.

“We’re negotiating with Teamsters Local 838,” said Richard Stacy, regional vice president with Woodbridge Logistics. “If cost and other issues aren’t resolved successfully, we may have to shut down our six locations,” in Dayton, New Brunswick, North Brunswick, Woodbridge and Avenel.

No one at the Mountainside-based union was available for comment.

Woodbridge Logistics, a division of national food distributor C&S Wholesale Grocers, filed a Worker Adjustment and Retraining Notification Act notice with the state Labor department, indicating up to 1,114 workers could lose their jobs Feb. 6.

When Great Atlantic & Pacific Tea Co. filed for bankruptcy protection Dec. 12, the Montvale-based supermarket company cited C&S’ distribution costs as one of the reasons for the filing.

Existing-Home Sales Resume Uptrend with Stable Prices
WASHINGTON , December 22, 2010
Existing-home sales got back on an upward path in November, resuming a growth trend since bottoming in July, according to the National Association of Realtors®.

Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 5.6 percent to a seasonally adjusted annual rate of 4.68 million in November from 4.43 million in October, but are 27.9 percent below the cyclical peak of 6.49 million in November 2009, which was the initial deadline for the first-time buyer tax credit.

Lawrence Yun, NAR chief economist, is hopeful for 2011. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” he said.

Yun added that home buyers are responding to improved affordability conditions. “The relationship recently between mortgage interest rates, home prices and family income has been the most favorable on record for buying a home since we started measuring in 1970,” he said. “Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.”

Prichard proposed capping benefits to current retirees at about $200 a month, down from monthly payments of as much as $3,000. “That’s not a hair cut, that’s a scalping,” said Larry Voit, who represented a group of 40 retired city workers in Prichard, population 27,500.

Off-price retailer Syms Corp. plans to lay off 108 people and dramatically reduce the flow of goods through its Secaucus distribution center, according to state documents and a union official.

The company has told the New Jersey Department of Labor and Workforce Development that the layoffs set to take place Jan. 30 will include three managers along with drivers, packers, loaders and clerks.

About 15 people will remain at the center, and the company will instead supply its stores almost entirely through another distribution center in Boston, said Alvin Ramnarain, field director for Local 1102 of the Westbury, N.Y.-based Retail Wholesale Department Store Union.

U.S. home prices fell 3.4 percent in October from a year earlier as sales of foreclosed properties dragged down values, the Federal Housing Finance Agency said.

The decline was led by an 8.1 percent slump in the region that includes Nevada and Arizona, the agency said today in a report from Washington. Prices decreased 5.7 percent in the area that includes Mississippi and dropped 5.6 percent in California and other West Coast states.

Foreclosures reduce real estate values because they sell at cut-rate prices. U.S. homes in the default process sold for about 32 percent less than non-distressed properties in the third quarter, the biggest discount in five years, according to RealtyTrac Inc., an Irvine, California-based data seller.

National home prices will not increase from the previous year until the fourth quarter of 2012, according to a panel of economists surveyed by MacroMarkets, a financial technology company.

The survey was compiled from 110 responses in December, and it is based upon the projected path of the Standard & Poor’s/Case-Shiller national home price index over the next five years. According to the survey, home prices in the fourth quarter of 2010 will show a 1.13% drop from a year ago, but will begin to stabilize.

At the end of 2011, prices are expected to remain 0.17% below where they will be at the end of this year. But by the close of 2012, prices will have begun its long journey to recovery, increasing nearly 2% from 2011, according those surveyed. By 2015, prices will be increasing by more than 3.5% from the previous year.
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Robert Shiller, who co-founded MacroMarkets and remains its chief economist, said less than 3% of those surveyed expected a negative change in 2015. The 3.7% increase expected in that year would be higher than the average annual rate of increases before the bubble.

Foot Locker the leading global athletic footwear and apparel retailer has announced that they are prepared to made an offer for the naming rights of the New Meadowlands Stadium.

The new home for the New York Giants and New York Jets, has already made big news as they were awarded the Super Bowl for 2014. Now the business side has taken over as the owners of the New Meadowlands Stadium have announced that they are accepting offers for the naming rights of the new stadium.

Multiple sources are quoting the Foot Locker is prepared to make an offer to capitalize on the major news story related to Rex and Michelle Ryan’s Foot Fetish. Ken Hicks, President & CEO of Foot Locker is reportedly prepared to offer 55 million for five years.

Ken Hicks in a press release proudly stated that Food Locker and Football is a marriage made in Heaven. He also stated that Rex and Michelle Ryan given their history with feet and football would make perfect spokespersons.

The New York Post in an article concerning the decision suggested that the NFL may not permit such a naming. Given the league’s control over keeping their image clean, however since Rex and Michelle are both married and there is nothing wrong with liking feet they may have to approve it.

Foot Locker is a leading global athletic footwear and apparel retailer. Its stores offer the latest in athletic-inspired performance products, manufactured primarily by the leading athletic brands. Foot Locker offers products for a wide variety of activities including basketball, running, and training. Its 1,911 stores are located in 21 countries including 1,171 in the United States, Puerto Rico, the U.S. Virgin Islands, and Guam, 129 in Canada, 518 in Europe, and a combined 93 in Australia and New Zealand. The domestic stores have an average of 2,400 selling square feet and the international stores have an average of 1,500 selling square fee

The fact that many mortgage holders have negative equity in their homes stymies modification efforts. In the case of HAMP, the cost of carrying a house must be reduced to 31 percent of the owner’s pretax income. Even if permanent modification is achieved, adding other debt payments to arrive at a total debt-to-income ratio boosts the average participant’s debt burden to 63.4 percent of income.

This is insane. This is when you should be running to bankruptcy. Assumes gross income is $50,000. These participants are spending on average ab0ut $2600/month on debt service (housing, car note, credit cards etc), and lets assume that 20% of gross income goes to taxes (about 800/month). That leaves about 700/month for the family to live off of!! 700 per month to cover groceries, utilities, phone, TV, car repairs, gas, etc

Put another way, of all the hours these participants work, day in and day out, only 17% – 20% of those hours worked ever end up in the family’s pocket and those must cover basic living expenses. If they are working 40hrs/wk, 8 hrs/day, then of the 40 hours they work each week, only 8 hours, 1 of the 5 work days, ends up in their own pocket. Every month they work, they work 4 days for themselves and 26 days for other people.

Cat 41 That is how I run numbers i regard to home buying. There are some “great deals” out there , sure there are. I talk to people who are buying some I know what they make others have a good idea. I wonder what the hell they are thinking. The sheep have been brainwashed to think this is the way it should be. Not sustainable, will end badly.

No one. Your entitled to the PURSUIT OF, not the guaranteed success of your pursuits.

if you’re paying nonproductive debts (i.e debt service to loans that were NOT used to generate income) then the hours worked to pay that debt service are not hours worked for yourself. If you are free of nonproductive debts then CONGRATS, you have achieved what few have.

I would argue that it is not in societies net interest to have a large number people in debt serfdom. From the point of view that the ends justify the means, then all you care about is your point”someone’s debt is someone’s asset“. Though, given our current economic system debt serfdom is then end result if we dont have some sort of massive reset and clearing of the system as our current fiat system demands that debt be created for economic growth to occur. A nasty catch 22 from a social perspective.

What he heck are you talking about, people buy bonds, munis, CDs mortgage backs, have money in savings accounts buy t-bills etc. with their hard earned assets and expect to earn interest and get their principal back.

Now that is evil?

Schrodinger’s Cat says:
December 23, 2010 at 11:36 am

44 juice,

I would argue that it is not in societies net interest to have a large number people in debt serfdom. From the point of view that the ends justify the means, then all you care about is your point”someone’s debt is someone’s asset“. Though, given our current economic system debt serfdom is then end result if we dont have some sort of massive reset and clearing of the system as our current fiat system demands that debt be created for economic growth to occur. A nasty catch 22 from a social perspective.

With nearly half of total bank assets backed by residential real estate, both homeowners on the cusp of negative equity and the banking system as a whole remain concerned amid the resumption of home price declines.[8] This unease highlights the housing market’s fragility and suggests there may be no pain-free path to the eventual righting of the market. No perfect solution to the housing crisis exists. The latest price declines will undoubtedly cause more economic dislocation. As the crisis enters its fifth year, uncertainty is as prevalent as ever and continues to hinder a more robust economic recovery.Given that time has not proven beneficial in rendering pricing clarity, allowing the market to clear may be the path of least distress.

Please note that if they actually let the market clear then the market gains we have seen in this “recovery” are likely to evaporate with little notice.

Now that is evil?
Without getting into a philosophical debate on debt, it generally is not. The problem is excessive debt levels. Excessive debt levels have net negative social impact.

As you have pointed out before, the global wage arbitration game has forced joe six pack to chase yield into ever riskier vehicles just to maintain the status quo. In the end it’s not significantly different from a junky trying to get the same high over and over by using larger dosed. It’s not a problem until you OD and your heart stops.

That FED article abounds wiht common sense which is shocking for something xoming out of the FED!

Failed modifications suggest that, without strong income growth, the bounds of affordability can be stretched only so far

Now if we could just figure out how to generate STRONG income growth. I suppose some aggressive inflation could help with that.

hey JJ how does that whole global wage arbitration thingy work again? That will cause US incomes to INCREASE, right????? ;)

I suppose we could always go in the opposite direction and stop trying to play the affordability game, allowing RE to return to naturally sustainable levels. Of course there is the little catch 22 that such a move would NUKE the FIRE economy.

Cat -the serfdom you speak of is voluntary, nobody made you take on odious credit in whatever form school loans, credit cards, Mortgages etc. “Debt Dolt” is a better Tag than “Debt Serf”. My patience has worn thin for the Dolts they can walk away or pay up it is their choice just like when they signed on the dotted line and sold their future earnings for gratification today.

Read your letter with great interest. However, the very notion that the Pinto would explode after getting plowed from behind has caused much derisive laughter directed at you, my good ‘man’.
In summation I must insist that you should in fact ‘blow me’. Mind your business and we’ll mind ours.

RE 73, jist of article is the same problem they are having in Germany right now. College educated people with big houses and plenty of money are only having 1 or 2 kids while lower educated Lationos and minorities are having multiple kids. These kids born into poor often non english speaking families or illegal families who must likely won’t attend college or may end up at some point in jail are who replaced the Irish Catholic Stockbroker with five kids he he will send to great colleges without financial aid and whose five kids will pay a ton of taxes over their lifetime.
Mr Stockbroker 2010 will only have one or two kids instead of five with the remaing growth coming frm illegals and illegimate inner city kids who pay no taxes but take a huge amount of services is a recipie for disaster.

Germany right now is giving a tax credit to couples with college degrees who have kids, the USA gives a tax credit to low income or unemplyed people to have kids, but actually penalizes wealthy people from having kids by taking away their deduction.

You guys are real damn negative. I’m damn sick of hearing about layoffs, bankruptcies, damn foreclosures and stinking vultures insulting people with a damn lowball offer. It’s Christmas dammit, it’s supposed to be a happy time. I got $ 500 left on my damn credit card line and after reading this crap, I’m forced to go out and spend that just to feel better.

I agree with you to a point,but it is more complex then that. I am all for personal responsibility and accepting the consequences of your actions. However, in the real world there are artificial interventions that virtually force people to play the debt game. You want to go to college? The never ending stream of government money for college has allowed colleges to continuously increase rates as astounding levels, as they know that they wont price their customers out do the ever present government student loans ( which are pretty close to evil given that they are next to impossible to discharge). Good luck getting a college degree wihtout any debt. It is possible but not easy ( i did so myself)
On top of that general social manipulation of the the public at large by corporations have been taken to an art form. Virtually every facet of modern consumer culture encourages debt with commercials making fun of people who arent leveraged to the hilt. I was at the mall once during this holiday season and saw to disgusting examples of the above; Google the american express “PASS” program, and a huge add in front of one of the woman’s stores along the lines of “shop till you drop, just CHARGE it!”.

I’m suggesting you feel sorry for people who have buried themselves in debt but it is something that needs to be corrected and will in time ( by market forces) whether we like it or not.

Regarding student loans:Stafford federal loans have two types of loans a)Subsidized b)Unsubsidized.
Subsidized is not bad because the government pay then interest while you are in school.It is very hard to get.They check for parents income.

Unsubsidized is ridiculous.The interest is compounding,currently at 6.8%.It starts the day the loan is dispensed.With deffered payments till 6 months after graduation that interest is painfull.They only give you portion of the amount needed, need to go for a private loan and need the parents to co-sign the private loan.

I don’t know how kids with parents that makes over a 100K will pay their loans.It is better for a kid that can get federal grants.No loan to pay.

Go to a community college for 2 years, get an associate’s degree with a 3.0 or above and you can transfer to almost any 4 year state college in New Jersey. Total cost: about 2-3K per semester + books. Nothing a part time job(20-30 hrs/week) while living with parents can’t cover.

Transfer to a 4 year college, and walk out with the same degree as the guy that paid room and board for all 4. If you have a specific major in mind, talk with an adviser beforehand and they’ll make sure you take the specific classes that they know will definitely transfer.

Don’t whine about college costs if you’re looking for 4 years of partying.

New Jersey’s pension shortfall grew more than $8 billion over the last fiscal year, to a total of about $53.9 billion, according to figures released today by the Department of Treasury.

Altogether, New Jersey’s pension system is 62 percent funded.

The figure includes all pensions, for state, school, local and public safety workers, and are drawn from actuaries’ estimates of the number of future retirees, their salaries and expected return on pension funds’ investments.

This whole consumerist, shop til you drop thing is aimed toward one group – people who are insecure about their value as human beings. A day or so ago, I read about a woman who was robbed in a Shop-Rite parking lot on Route 22. The victim, a resident of Hillside, reported that the man stole her Gucci bag. So why is a woman who lives in a town like Hillside carrying a Gucci bag?? Wouldn’t she be better off getting a bag at Kohls for 30 bucks and saving the rest to better her life? Is she trying to appear wealthy? The truly wealthy do not pay attention to price tags. If they like a bag, they buy it, whether it is 30 bucks or 300.
Look at advertising – it all says, “Everyone will know you are a unique and special snowflake if you buy this product.” What is left unsaid is “If you do not have this product, everyone will know what you are really like – worthless.” Sick. Keep your cash in your pockets people. You’re going to need it.

No need for 2011 predictions. We’ve been discussing this for the last 4-5 years.

“PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.”

“Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.”

Triple Five, owner of the Mall of America in Minnesota, will take over development of New Jersey’s stalled Meadowlands Xanadu shopping and entertainment complex as lenders seek to revive the project.

Triple Five signed a letter of intent with the lender group under a plan that is supported by New Jersey Governor Chris Christie, according to a joint statement today. Creditors took control of the project in August from a group led by Colony Capital LLC after construction was halted.

About 70 percent of foreclosures nationwide are in the 27 so-called non-judicial states, where banks and other servicing companies don’t need judges to sign off on foreclosures, Dodd, the Connecticut Democrat, said at a hearing last month.

>>This whole consumerist, shop til you drop thing is aimed toward one group – people who are insecure about their value as human beings.<<

Bullspit! I'm secure in my damn value and that's why I want to treat myself as being damn valuable by buying my damn stuff. What the hell is the point of having some damn money and credit if you can't spend it? People like you need to get with the damn program.

Triple Five, owner of the Mall of America in Minnesota, will take over development of New Jersey’s stalled Meadowlands Xanadu shopping and entertainment complex as lenders seek to revive the project.

LMFAO!!! Oh…. My….. God!! In 2014, no less! You can’t make this sh1t up. Do they know this is Jersey? Do they know how many backstabbing, hatchet throwing, knife wielding, gun toting f*cking maniacs they need to go through to get to the finish line? They will be bleed to death one dollar at a time. Those Fargo-tongued f*cks will be selling body parts not only to save the POS called Xanadoodoo, but to save the “Maul” of America as well. Wait until the see all the dead bodies previously know as Xanadu investors when they drive by Berry’s Creek.

“Triple Five, owner of the Mall of America in Minnesota, will take over development of New Jersey’s stalled Meadowlands Xanadu shopping and entertainment complex as lenders seek to revive the project.”

Re:106 – Been to the Mall of America the gangs regularly attack each other and the women of these gangs have been know to slash each other faces. Security just puts up Caution Tape around the crime scene and the shoppers move on.

It seems to be the repeating theme amongst College students that I run into. Poor folks dont know what to major in and cant justify the cost anyway. 30-40k/year for a healthy dose of indoctrination and 4 years of lost income just for starters. That will get you the status quo not a job.

Id love to pull a Texas hedge on my kids education. I would rather dump 200k on their lap at 22 if they can survive on their own from 18. Maybe even send them overseas at 16 to see the world a bit. They can do the college garbage at night school then transfer to a school thereafter. One things for sure. Im not dumping 40k/year to have my kid sit in class with a bunch of f_ckin commie bastards.

I know the feeling. It’s like just talking about some things puts the hex on you. Marry that to soccer, and I guess it explains why my 12 y/o kid has lucky socks and a pregame ritual that includes everything except the sacrifice of a chicken.

Failed bond auction in China. That’ll put a dent in your Xmas. If you’re Chinese. And if you were allowed to celebrate Christmas.

Anybody know the Mandarin phrase for “threw up in my mouth a little”?

“As the rest of the world celebrates Christmas, blissfully pretending all is good, and the Fed can manipulate markets to infinity without at least one of the numerous violated laws of physics being reasserted in the process, things in China are once again reminding those who care that just as liquidity giveth, so does liquidity taketh away. We pointed out a week ago that the 7 day Repo rate in China recently hit a post-Lehman high, as banks are increasingly concerned that following 3 RRR hikes, the PBOC has no choice but to resort to some tightening measure that actually works. As a result excess liquidity has suddenly become rarer than hen’s teeth. Today we get a first hand lesson of why this was material: Dow Jones reports that the Chinese MoF has failed to attract sufficient interest in its 3 Month 20 billion CNY auction. The result: SHCOMP is now down 1.2%. Bottom line: as the world is sleeping, China just had a failed bond auction. If news mattered, this would be a very disturbing event. Luckily for Ben, it doesn’t. For the time being. It will soon. Then Montier’s mean reversion meme may just strike with great deferred vengeance and furious accrued anger.”